TerrAscend (OTC: TSNDF) posts Q2 2026 loss, adds debt and exits Michigan
TerrAscend Corp. reports modest top-line growth but continued losses. For the three months ended June 30, 2026, revenue from continuing operations was $67.1 million versus $65.0 million a year earlier, generating gross profit of $36.3 million and income from operations of $12.1 million. A heavy income tax provision of $11.6 million turned $1.5 million of pre‑tax income from continuing operations into a net continuing loss of $10.1 million. Including discontinued operations, net loss for the quarter was $8.1 million, or $(0.03) per share, compared with a $48.1 million loss, or $(0.17) per share, in the prior‑year quarter.
At June 30, 2026, TerrAscend held $42.0 million in cash and cash equivalents and total assets of $553.7 million against total liabilities of $469.7 million, including $209.7 million of loans payable principal and a $152.5 million liability on uncertain tax positions. Shareholders’ equity was $84.0 million, with an accumulated deficit of $883.0 million and 309.2 million common shares outstanding. The company completed the strategic exit of its Michigan business, deconsolidated those entities, and recorded a $2.4 million gain in discontinued operations, with cumulative restructuring costs of $0.7 million. It expanded its New Jersey footprint via the Union Chill acquisition (total consideration $13.5 million) and issued 21,835 secured convertible debentures maturing in 2031 at an 8.00% coupon and $0.87 conversion price. The FocusGrowth term loan remained the dominant borrowing, with $202.1 million principal outstanding after prepayments, while a share repurchase program continued with 578,500 shares bought back in the first half of 2026.
Positive
- None.
Negative
- None.
Filing Explained
The completed financing refinanced maturing debt while leaving conditional conversion dilution and additional secured debt outstanding.
This unaudited Form 10-Q provides TerrAscend’s quarterly financial update and reports a completed private placement of secured convertible debentures; the financing adds debt now and creates possible future common-share dilution.
The company closed the initial issuance and sale of 21,835 debentures at a purchase price of
A private placement is a sale of securities to selected investors outside a public offering. These debentures mature on
Holders may convert the debentures into common shares at
The debentures are secured by a second lien on certain U.S. business assets and by specified personal-property security from TerrAscend USA, Inc. The next material resolution points are any holder conversions and any election to pay interest in kind before the
Key Figures
Key Terms
variable interest entity financial
discontinued operations financial
retained economic interest financial
uncertain tax position financial
Share Repurchase Program financial
convertible debentures financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did TerrAscend (TSNDF) perform financially in Q2 2026?
What were TerrAscend (TSNDF)’s results for the first half of 2026?
What is the cash and debt position of TerrAscend (TSNDF) as of June 30, 2026?
What did the Michigan exit mean for TerrAscend (TSNDF)’s results?
What are the key terms of TerrAscend (TSNDF)’s 2026 private placement convertible debentures?
What acquisitions and expansion steps did TerrAscend (TSNDF) take in 2026?
How many shares of TerrAscend (TSNDF) are outstanding, and is there a buyback program?
ROC
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 5, 2026, the registrant had
Table of Contents
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Page |
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PART I. |
FINANCIAL INFORMATION |
1 |
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Item 1. |
Financial Statements (Unaudited) |
1 |
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Unaudited Interim Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 |
1 |
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Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2026 and 2025 |
2 |
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Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2026 and 2025 |
3 |
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Unaudited Interim Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 |
5 |
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Notes to Unaudited Interim Condensed Consolidated Financial Statements |
7 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
27 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
40 |
Item 4. |
Controls and Procedures |
40 |
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PART II. |
OTHER INFORMATION |
40 |
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Item 1. |
Legal Proceedings |
40 |
Item 1A. |
Risk Factors |
40 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
41 |
Item 3. |
Defaults Upon Senior Securities |
41 |
Item 4. |
Mine Safety Disclosures |
41 |
Item 5. |
Other Information |
41 |
Item 6. |
Exhibits |
42 |
Signatures |
44 |
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Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains statements that TerrAscend Corp. (the "Issuer") believes are, or may be considered to be, “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q regarding the prospects of the industry in which the Issuer, its subsidiaries, including TerrAscend Growth Corp. ("TerrAscend") and its subsidiaries (collectively, the "Company") operate or the Company's prospects, plans, financial position or business strategy may constitute forward-looking statements. Such statements can be identified by the use of forward-looking terminology such as "can", “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may” or “will” happen, or by discussions of strategy. Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other statements that are not statements of fact. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements with respect to:
Certain of the forward-looking statements contained herein concerning the cannabis industry and the general expectations of the Company concerning the cannabis industry are based on estimates prepared by the Company using data from publicly-available governmental sources as well as from market research and industry analysis and on assumptions based on data and knowledge of the cannabis industry. Such data is inherently imprecise. The cannabis industry involves risks and uncertainties that are subject to change based on various factors, which are described below.
With respect to the forward-looking statements contained in this Quarterly Report on Form 10-Q, the Company has made assumptions regarding, among other things: (i) its ability to generate cash flows from operations and obtain necessary financing on acceptable terms; (ii) general economic, financial market, regulatory and political conditions in jurisdictions in which the Company operates; (iii) the output from the Company’s operations; (iv) consumer interest in the Company’s products; (v) competition in the cannabis industry; (vi) anticipated and unanticipated costs; (vii) government regulation of the Company’s activities and products; (viii) government regulation of licensing, taxation and environmental protection; (ix) the timely receipt of any required regulatory approvals; (x) the Company’s ability to obtain qualified staff, equipment and services in a timely and cost efficient manner; (xi) the Company’s ability to conduct operations in a safe, efficient and effective manner; and (xii) the Company’s construction plans and timeframe for completion of such plans.
Readers are cautioned that the above list of cautionary statements is not exhaustive. Known and unknown risks, many of which are beyond the control of the Company, could cause actual results to differ materially from the forward-looking statements in this Quarterly Report on Form 10-Q. Such risks and uncertainties include, but are not limited to, current and future market conditions; risks related to federal, state, provincial, territorial, local and foreign government laws, rules and regulations, including federal and state laws in the United States relating to cannabis operations in the United States; and those discussed under Item 1A – “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on March 12, 2026. The purpose of forward-looking statements is to provide the reader with a description of management’s expectations, and such forward-looking statements may not be appropriate for any other purpose. You should not place undue reliance on forward-looking statements contained in this Quarterly Report on Form 10-Q. The Company can give no assurance that such expectations will prove to have been correct. Forward-looking statements contained herein are made as of the date of this Quarterly Report on Form 10-Q and are based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking statements are made. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking statements, except as required by applicable law.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
TerrAscend Corp.
Unaudited Interim Condensed Consolidated Balance Sheets
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
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At |
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June 30, 2026 |
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December 31, 2025 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable, net |
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Investments |
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Inventory |
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Prepaid expenses and other current assets |
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Assets from discontinued operations, current |
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Total current assets |
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Non-current assets |
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Property and equipment, net |
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Deposits |
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Operating lease right of use assets |
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Intangible assets, net |
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Goodwill |
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Other non-current assets |
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Total non-current assets |
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Total assets |
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$ |
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Liabilities and shareholders' equity |
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Current liabilities |
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Accounts payable and accrued liabilities |
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$ |
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$ |
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Deferred revenue |
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Convertible debt |
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Loans payable |
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Operating lease liability |
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Derivative liability |
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Corporate income tax payable |
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Liabilities from discontinued operations |
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Total current liabilities |
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Non-current liabilities |
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Loans payable |
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Operating lease liability |
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Derivative liability |
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Convertible debt |
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Deferred income tax liability |
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Liability on uncertain tax position |
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Other long-term liabilities |
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Total non-current liabilities |
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Total liabilities |
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Commitments and contingencies |
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Shareholders' equity |
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Share capital |
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Series A, convertible preferred stock, no par value, unlimited shares authorized; |
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— |
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— |
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Series B, convertible preferred stock, no par value, unlimited shares authorized; |
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— |
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— |
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Exchangeable shares, no par value, unlimited shares authorized; |
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— |
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— |
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Common shares, no par value, unlimited shares authorized; |
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Treasury stock, |
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Additional paid in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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( |
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( |
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Non-controlling interest |
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Total shareholders' equity |
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Total liabilities and shareholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
1
TerrAscend Corp.
Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
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For the Three Months Ended |
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For the Six Months Ended |
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June 30, 2026 |
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June 30, 2025 |
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June 30, 2026 |
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June 30, 2025 |
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Revenue, net |
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$ |
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$ |
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$ |
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$ |
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Cost of sales |
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Gross profit |
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Operating expenses: |
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General and administrative |
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Amortization and depreciation |
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Other operating expense |
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— |
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— |
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— |
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Total operating expenses |
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Income from operations |
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Other expense (income) |
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Finance and other expenses |
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Unrealized and realized loss (gain) on investments |
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( |
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Loss (gain) on fair value of derivative liabilities |
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( |
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( |
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( |
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(Gain) loss from revaluation of contingent consideration |
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— |
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( |
) |
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— |
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Unrealized and realized foreign exchange loss (gain) |
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( |
) |
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( |
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Income from continuing operations before provision for income taxes |
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Provision for income taxes |
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Net loss from continuing operations |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Discontinued operations: |
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Income (loss) from discontinued operations, net of tax |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
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Net loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Foreign currency translation adjustment |
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( |
) |
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( |
) |
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Comprehensive loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Net loss from continuing operations attributable to: |
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Common and proportionate Shareholders of the Company |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
Non-controlling interests |
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$ |
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$ |
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$ |
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$ |
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Comprehensive loss attributable to: |
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Common and proportionate Shareholders of the Company |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
Non-controlling interests |
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$ |
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$ |
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$ |
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$ |
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Net (loss) income per share - basic & diluted: |
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Continuing operations |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
Discontinued operations |
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( |
) |
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— |
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( |
) |
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Net loss per share - basic & diluted |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Weighted average number of outstanding common shares - basic & diluted |
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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
2
TerrAscend Corp.
Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
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Number of Shares |
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Convertible Preferred Stock |
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Common Shares |
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Exchangeable Shares |
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Series A |
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Series B |
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Common Shares Equivalent |
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Additional paid in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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Non-controlling interest |
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Total |
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Balance at December 31, 2025 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Shares issued - stock options, warrant and RSU exercises |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Share-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Capital distributions |
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— |
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— |
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— |
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— |
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— |
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|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Repurchase of common stock, including excise tax |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Derecognition of non-controlling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Net (loss) income for the period |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Foreign currency translation adjustment |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balance at March 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||||
Shares issued - stock options, warrant and RSU exercises |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Capital distributions |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Capital contribution |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Repurchase of common stock, including excise tax |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Share-based compensation expense |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Net (loss) income for the period |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Foreign currency translation adjustment |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balance at June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||||
3
|
|
Number of Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
|
|
|
|
|
Convertible Preferred Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Common Shares |
|
Exchangeable Shares |
|
Series A |
|
Series B |
|
Common Shares Equivalent |
|
Treasury Stock |
|
|
Additional paid in capital |
|
|
Accumulated other comprehensive income |
|
|
Accumulated deficit |
|
|
Non-controlling interest |
|
|
Total |
|
|||||||||||
Balance at December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||||
Shares issued - stock options, warrant and RSU exercises |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Share-based compensation expense |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Capital distributions |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Repurchase of common stock, including excise tax |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Net (loss) income for the period |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Foreign currency translation adjustment |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balance at March 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||||
Shares issued - stock options, warrant and RSU exercises |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Shares issued - acquisitions |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Shares issued - conversion |
|
|
|
|
— |
|
|
( |
) |
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Shares issued - price protection adjustment |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Repurchase of common stock, including excise tax |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Share-based compensation expense |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Capital distributions |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net loss for the period |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Foreign currency translation adjustment |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
4
TerrAscend Corp.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
|
For the Six Months Ended |
|
|||||
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Operating activities |
|
|
|
|
|
||
Net loss from continuing operations |
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash provided by operating activities |
|
|
|
|
|
||
Accretion and accrued interest |
|
|
|
|
|
||
Depreciation of property and equipment and amortization of intangible assets |
|
|
|
|
|
||
Amortization of operating right-of-use assets |
|
|
|
|
|
||
Share-based compensation |
|
|
|
|
|
||
Deferred income tax expense |
|
|
|
|
|
||
Gain on fair value of derivative liabilities |
|
( |
) |
|
|
( |
) |
Unrealized and realized loss on investments |
|
|
|
|
|
||
Loss from revaluation of contingent consideration |
|
|
|
|
|
||
Provision for expected credit loss |
|
|
|
|
|
||
Unrealized and realized foreign exchange loss (gain) |
|
|
|
|
( |
) |
|
Impairment and other |
|
|
|
|
( |
) |
|
Changes in operating assets and liabilities |
|
|
|
|
|
||
Receivables |
|
( |
) |
|
|
( |
) |
Inventory |
|
( |
) |
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
|
( |
) |
|
Income taxes paid and tax related liabilities |
|
|
|
|
|
||
Prepaid expense and other current assets |
|
( |
) |
|
|
|
|
Other assets and liabilities |
|
( |
) |
|
|
|
|
Net cash provided by operating activities - continuing operations |
|
|
|
|
|
||
Net cash used in operating activities - discontinued operations |
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
||
|
|
|
|
|
|
||
Investing activities |
|
|
|
|
|
||
Investment in property and equipment |
|
( |
) |
|
|
( |
) |
Investment in note receivable, net of interest received |
|
|
|
|
|
||
Investment in intangible assets |
|
( |
) |
|
|
( |
) |
Cash portion of consideration paid in acquisition, net of cash received |
|
( |
) |
|
|
( |
) |
Refund of deposit for business acquisition |
|
|
|
|
|
||
Deposit for business acquisition |
|
( |
) |
|
|
|
|
Net cash used in investing activities - continuing operations |
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) investing activities - discontinued operations |
|
|
|
|
( |
) |
|
Net cash used in investing activities |
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Financing activities |
|
|
|
|
|
||
Proceeds from loan payable, net of transaction costs |
|
|
|
|
|
||
Loan principal paid, including exit fees |
|
( |
) |
|
|
( |
) |
Capital distributions paid to non-controlling interests |
|
( |
) |
|
|
( |
) |
Payment for contingent consideration |
|
|
|
|
( |
) |
|
Proceeds from convertible debentures, net of issuance costs |
|
|
|
|
|
||
Convertible debentures principal paid |
|
( |
) |
|
|
|
|
Proceeds from exercise of stock options |
|
|
|
|
|
||
Repurchases of common shares |
|
( |
) |
|
|
( |
) |
Net cash (used in) provided by financing activities - continuing operations |
|
( |
) |
|
|
|
|
Net cash used in financing activities - discontinued operations |
|
( |
) |
|
|
|
|
Net cash (used in) provided by financing activities |
|
( |
) |
|
|
|
|
|
|
|
|
|
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash during the period |
|
|
|
|
( |
) |
|
Net effects of foreign exchange |
|
|
|
|
( |
) |
|
Cash and cash equivalents and restricted cash, beginning of the period |
|
|
|
|
|
||
Cash and cash equivalents and restricted cash, end of the period |
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
5
TerrAscend Corp.
Unaudited Interim Condensed Consolidated Statements of Cash Flows (Continued)
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
|
For the Six Months Ended |
|
|||||
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Supplemental disclosure with respect to cash flows |
|
|
|
|
|
||
Cash (received) paid for Federal income tax, net |
$ |
( |
) |
|
$ |
|
|
Cash paid for State income tax, net |
|
|
|
|
|
||
New Jersey |
|
|
|
|
|
||
Maryland |
|
|
|
|
|
||
Pennsylvania |
|
— |
|
|
|
— |
|
Other |
|
|
|
|
|
||
Total cash (received) paid for income tax, net |
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
||
Interest paid |
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
Non-cash transactions |
|
|
|
|
|
||
Note receivable issued as a noncontrolling interest contribution |
$ |
|
|
$ |
— |
|
|
Change in accrued capital expenditures |
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
6
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
1. Nature of operations
TerrAscend Corp. (the "Issuer") was incorporated under the Business Corporations Act (Ontario) on
The Company operates under three state-level reportable segments consisting of New Jersey, Maryland and Pennsylvania, focused on the production and sale of cannabis products. Operations in other states are presented within All other segments.
The Company owns a portfolio of operating businesses, including:
The common shares in the capital of the Company ("Common Shares") commenced trading on the Canadian Securities Exchange on May 3, 2017 under the ticker symbol "TER" and continued trading on the CSE until the listing of the Common Shares on the Toronto Stock Exchange (the "TSX"). Effective July 4, 2023, the Common Shares commenced trading on the TSX under the ticker symbol "TSND". The Common Shares commenced trading on the OTCQX in the United States on October 22, 2018 under the ticker symbol "TRSSF", which was subsequently changed to "TSNDF", effective July 6, 2023. The Company’s registered office is located at 77 City Centre Drive, Suite 501, Mississauga, Ontario, L5B 1M5, Canada.
These unaudited interim condensed consolidated financial statements included herein (the “Consolidated Financial Statements”) of the Company and its subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
The accompanying Consolidated Financial Statements contained in this report are unaudited. In the opinion of management, these Consolidated Financial Statements have been prepared on the same basis as the annual consolidated financial statements and notes thereto of the Company and include all adjustments, consisting only of normal recurring adjustments, considered necessary for the fair presentation of the Company’s financial position and operating results. The results for the three and six months ended June 30, 2026 are not necessarily indicative of the operating results for the year ended December 31, 2026, or any other interim or future periods.
The accompanying Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company for the year ended December 31, 2025 contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (the "SEC") on March 12, 2026 (the "Annual Report").
7
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
Certain prior period amounts, primarily related to discontinued operations, have been reclassified in the Consolidated Financial Statements and accompanying notes to conform to the current period presentation. Unless otherwise noted, amounts and disclosures throughout these notes to the Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations. See Note 7 for additional information.
There were no significant changes to the policies disclosed in Note 2 of the summary of significant accounting policies of the Company’s audited consolidated financial statements for the year ended December 31, 2025 in the Company's Annual Report.
The Company consolidates entities in which it has a controlling financial interest by evaluating whether the entity is a voting interest entity (“VOE”) or a variable interest entity (“VIE”).
In connection with the listing of its Common Shares on the TSX, the Company undertook a strategic reorganization of its ownership structure (the “2023 Reorganization”) to align with TSX regulatory requirements regarding U.S. based operations, in accordance with the TSX's Staff Notice 2017-0009. Specifically, the 2023 Reorganization was designed to separate the Company’s Canadian retail operations from its U.S. cultivation and manufacturing businesses in a manner that supports compliance with applicable listing standards while preserving the Company’s ability to consolidate the financial results of its U.S. operations under U.S. GAAP. Following the completion of the 2023 Reorganization, the Company holds a
Subsequent to the 2023 Reorganization, all operations in the United States have a functional currency of the U.S. dollar ("USD"). Canadian operations continue to have a functional currency of the Canadian dollar ("CAD").
Voting Interest Entities
A VOE is an entity in which (1) the total equity investment at risk is deemed sufficient to absorb the expected losses of the entity, (2) the at-risk equity holders, as a group, have all of the characteristics of a controlling financial interest and (3) the entity is structured with substantive voting rights. The Company consolidates the Canadian operations under a VOE model based on the controlling financial interest obtained through Common Shares with substantive voting rights.
The Company’s Canadian retail operations are conducted through a subsidiary that is
Variable Interest Entities
A VIE is an entity that lacks one or more characteristics of a controlling financial interest defined under the voting interest model. The Company consolidates VIE when it has a variable interest that provide it with (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits).
In connection with the 2023 Reorganization, TerrAscend issued and sold, on a private placement basis, Class A shares in the capital of TerrAscend ("Class A Shares") for aggregate gross proceeds of $
The Issuer determined that TerrAscend is a VIE, as all of the Company’s U.S. activities continue to be conducted on behalf of the Company which has disproportionately few voting rights. After conducting an analysis of the following VIE factors; purpose and
8
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
design of the VIE, the Protection Agreement in place, the structure of the Company's board of directors (the "Board"), and substantive kick-out rights of the holders of the Class A Shares, it was determined that the Company has the power to direct the activities of TerrAscend. In addition, given the structure of the Class A Shares where all of the losses and substantially all of the benefits of TerrAscend are absorbed by the Company, the Company consolidates as the primary beneficiary of TerrAscend in accordance with ASC 810. Although the Company does not currently hold Class A Shares, the Non-Voting Shares are exchangeable at the Company’s discretion and represent substantially all of the economic interest in the VIE. The investor’s Class A Shares provide only a fixed annual return and do not participate in the residual economics of the VIE, in accordance with the Protection Agreement, which supports the Company’s conclusion that it is the primary beneficiary of TerrAscend.
The Company's U.S. operations are consolidated through the VIE model. Therefore, substantially all of the Company's current assets, non-current assets, current liabilities and non-current liabilities are consolidated through the VIE model.
The Company's accounts receivable, net consisted of the following:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Trade receivables |
|
$ |
|
|
$ |
|
||
Sales tax receivable |
|
|
|
|
|
|
||
Other receivables |
|
|
|
|
|
|
||
Provision for current expected credit losses |
|
|
( |
) |
|
|
( |
) |
Total receivables, net |
|
$ |
|
|
$ |
|
||
The following table presents the aging of trade receivables:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Trade receivables |
|
$ |
|
|
$ |
|
||
Less: provision for current expected credit losses |
|
|
( |
) |
|
|
( |
) |
Total trade receivables, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Of which |
|
|
|
|
|
|
||
Current |
|
|
|
|
|
|
||
31-90 days |
|
|
|
|
|
|
||
Over 90 days |
|
|
|
|
|
|
||
Less: current expected credit losses |
|
|
( |
) |
|
|
( |
) |
Total trade receivables, net |
|
$ |
|
|
$ |
|
||
2026 Acquisitions
Union Chill
On January 2, 2026 (the "Union Chill Acquisition Date"), the Company acquired a 35% interest in Union Chill Cannabis Company LLC ("Union Chill"), a licensed cannabis operator, expanding its operational footprint in New Jersey. The Company obtained a transferable option to acquire the remaining
9
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
notes bearing interest at a rate of
The following table represents the fair value of assets acquired and liabilities assumed as of the Union Chill Acquisition Date and allocation of the consideration to net assets acquired:
|
|
(In thousands) |
|
|
Cash and cash equivalents |
|
$ |
|
|
Accounts receivable, net |
|
|
|
|
Inventory |
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
Operating right of use asset |
|
|
|
|
Property and equipment |
|
|
|
|
Intangible assets |
|
|
|
|
Goodwill |
|
|
|
|
Accounts payable and accrued liabilities |
|
|
( |
) |
Deferred revenue |
|
|
( |
) |
Operating lease liability |
|
|
( |
) |
Deferred tax liability |
|
|
( |
) |
Net assets acquired |
|
$ |
|
|
|
|
|
|
|
Consideration paid in cash |
|
$ |
|
|
Convertible debt |
|
|
|
|
Working capital adjustment |
|
|
|
|
Total consideration |
|
$ |
|
|
The acquired intangible assets include a license, which is treated as a definite lived intangible asset and amortized over a
The consideration paid reflected the synergies, economies of scale, and workforce. These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. None of the goodwill recognized is expected to be deductible for income tax purposes.
The accounting for this acquisition has been provisionally determined at June 30, 2026. The fair value of net assets acquired, specifically with respect to intangible assets, goodwill, property and equipment, and deferred tax liabilities have been determined provisionally and are subject to adjustment. Upon completion of a comprehensive valuation and finalization of the purchase price allocation, the amounts above may be adjusted retrospectively to the acquisition date during the measurement period.
During the three months ended June 30, 2026, the Company recorded the following measurement period adjustments to the provisional purchase price allocation based on additional information obtained about facts and circumstances that existed as of the acquisition date. The more significant adjustments, which resulted in a corresponding change to goodwill, were as follows:
Costs related to this transaction were $
10
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
The transaction was completed on the first business day of the fiscal year; therefore, the unaudited pro forma information is not materially different from the reported amounts. Total sales and net income since the Union Chill Acquisition Date are $
The Company’s inventory of cannabis and cannabis derived products includes both purchased and internally produced inventory and is comprised of the following items:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Raw materials |
|
$ |
|
|
$ |
|
||
Finished goods |
|
|
|
|
|
|
||
Work in process |
|
|
|
|
|
|
||
Accessories, supplies and consumables |
|
|
|
|
|
|
||
Total inventory |
|
$ |
|
|
$ |
|
||
TerrAscend Michigan
In June 2025, the Company committed to a plan to exit the Michigan market (the "Michigan Exit"). The Company determined that its decision to exit the Michigan market was considered a strategic shift that would have a major effect on the Company’s operations and financial results and met the criteria for classification as discontinued operations as of June 30, 2025.
In connection with the above, on May 5, 2026, the FG Agency Lending LLC, as the administrative agent under the FG Loan Agreement (as defined below), filed an application for receivership under the laws of the State of Michigan in the Oakland County Circuit Court (the “Court”), and each of the following entities related to the Michigan business: WDB Holding MI, Inc., AEY Capital LLC, AEY Holdings, LLC, Thrive Enterprises LLC, Spartan Partners Corporation, Spartan Partners Services LLC, Spartan Partners Licensing LLC, Spartan Partners Holdings, LLC and Spartan Partners Properties LLC (the “Michigan Receivership Entities”) have stipulated to the appointment of a receiver (“Receiver”) which was approved by the Court on May 6, 2026 (the “Michigan Receivership”).
As a result of the Receiver’s authority, in accordance with ASC 810, the Company concluded that it lost control of the Michigan Receivership Entities on May 6, 2026 and deconsolidated such entities as of that date. Upon deconsolidation, the Company derecognized the assets and liabilities of the Michigan Receivership Entities and recognized a gain on deconsolidation of $
In connection with the deconsolidation and in accordance with ASC 810, the Company recognized a retained economic interest of $
11
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
The following table summarizes the major classes of assets and liabilities of TerrAscend MI as of June 30, 2026 and December 31, 2025:
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
(In thousands) |
|
|||||
Current assets from discontinued operations |
|
|
|
|
|
||
Accounts receivable, net |
$ |
— |
|
|
$ |
|
|
Prepaid expenses and other current assets |
|
— |
|
|
|
|
|
Property and equipment, net |
|
— |
|
|
|
|
|
Operating lease right of use assets |
|
— |
|
|
|
|
|
Total current assets from discontinued operations |
$ |
— |
|
|
$ |
|
|
|
|
|
|
|
|
||
Current liabilities from discontinued operations |
|
|
|
|
|
||
Accounts payable and accrued liabilities |
$ |
— |
|
|
$ |
|
|
Operating lease liability |
|
— |
|
|
|
|
|
Finance lease liability |
|
— |
|
|
|
|
|
Other liabilities |
|
— |
|
|
|
|
|
Total current liabilities from discontinued operations |
$ |
— |
|
|
$ |
|
|
The following table presents the results of operations of TerrAscend MI for the three and six months ended June 30 2026 and 2025:
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
June 30, 2026 |
|
|
June 30, 2025 |
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||||
|
(In thousands) |
|
|
(In thousands) |
|
||||||||||
Revenue, net |
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of Sales |
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit |
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization and depreciation |
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Impairment of property and equipment |
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Other operating expense (income) |
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other expense (income) |
|
|
|
|
|
|
|
|
|
|
|
||||
Finance and other expenses |
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on deconsolidation |
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Income (loss) from discontinued operations before provision for income taxes |
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Provision for income taxes |
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss) from discontinued operations, net of tax |
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
During the three and six months ended June 30, 2026, the Company incurred $
12
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
Property and equipment consisted of:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Land |
|
$ |
|
|
$ |
|
||
Assets in process |
|
|
|
|
|
|
||
Buildings & improvements |
|
|
|
|
|
|
||
Machinery & equipment |
|
|
|
|
|
|
||
Office furniture & equipment |
|
|
|
|
|
|
||
Total cost |
|
|
|
|
|
|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
Assets in process primarily represent construction in progress related to both cultivation and dispensary facilities not yet completed, or otherwise not placed in service.
Depreciation expense was $
Intangible assets consisted of the following:
At June 30, 2026 |
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net Carrying Amount |
|
|||
|
|
(In thousands) |
|
|||||||||
Definite lived intangible assets |
|
|
|
|
|
|
|
|
|
|||
Software |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Licenses |
|
|
|
|
|
( |
) |
|
|
|
||
Non-compete agreements |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Total definite lived intangible assets |
|
|
|
|
|
( |
) |
|
|
|
||
Indefinite lived intangible assets |
|
|
|
|
|
|
|
|
|
|||
Brand intangibles |
|
|
|
|
|
— |
|
|
|
|
||
Total indefinite lived intangible assets |
|
|
|
|
|
— |
|
|
|
|
||
Intangible assets, net |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
At December 31, 2025 |
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net Carrying Amount |
|
|||
|
|
(In thousands) |
|
|||||||||
Definite lived intangible assets |
|
|
|
|
|
|
|
|
|
|||
Software |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Licenses |
|
|
|
|
|
( |
) |
|
|
|
||
Non-compete agreements |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Total definite lived intangible assets |
|
|
|
|
|
( |
) |
|
|
|
||
Indefinite lived intangible assets |
|
|
|
|
|
|
|
|
|
|||
Brand intangibles |
|
|
|
|
|
— |
|
|
|
|
||
Total indefinite lived intangible assets |
|
|
|
|
|
— |
|
|
|
|
||
Intangible assets, net |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
13
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
Amortization expense was $
Estimated future amortization expense for finite lived intangible assets for the next five years is as follows:
|
|
(In thousands) |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
As of June 30, 2026, the weighted average amortization period remaining on intangible assets was
The following table summarizes the activity in the Company’s goodwill balance:
|
|
(In thousands) |
|
|
Balance at December 31, 2025 |
|
$ |
|
|
Additions at acquisition date |
|
|
|
|
Balance at June 30, 2026 |
|
$ |
|
|
The Company's loans payable consisted of the following:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Ratio promissory note due |
|
|
|
|
|
|
||
Principal amount |
|
$ |
|
|
$ |
|
||
Deferred financing cost |
|
|
( |
) |
|
|
( |
) |
Net carrying amount |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Blue Ridge promissory note due |
|
|
|
|
|
|
||
Principal amount |
|
$ |
|
|
$ |
|
||
Unamortized discount |
|
|
( |
) |
|
|
( |
) |
Net carrying amount |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
FocusGrowth loan due |
|
|
|
|
|
|
||
Principal amount |
|
$ |
|
|
$ |
|
||
Unamortized discount and deferred financing cost |
|
|
( |
) |
|
|
( |
) |
Exit fee accretion |
|
|
|
|
|
|
||
Net carrying amount |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Other loans |
|
$ |
|
|
$ |
|
||
Total debt, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Loans payable, current |
|
|
|
|
|
|
||
Loans payable, non-current |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Total principal |
|
$ |
|
|
$ |
|
||
14
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
The Company had accrued interest on loans payable of $
FocusGrowth Term Loan
On August 1, 2024, the Company, as guarantor, TerrAscend USA, Inc. and certain subsidiaries and affiliates of the Company, as borrowers, the lenders party thereto and FG Agency Lending LLC, as administrative agent for the lenders, entered into a Loan Agreement, dated as of August 1, 2024, which provided for a
The FG Loan Agreement also provides for an uncommitted term loan facility of up to $
During the six months ended June 30, 2026, the Company made aggregate prepayments of $
Blue Ridge Promissory Note
In connection with the acquisition of Hempaid, LLC on June 30, 2023 ("Blue Ridge") the Company entered into a promissory note with Blue Ridge bearing interest at
Ratio Promissory Note
In connection with the acquisition of the assets of Ratio Cannabis, LLC on May 7, 2025 ("Ratio") the Company entered into a promissory note with Ratio bearing interest at
Other Loans
Class A Shares of TerrAscend Growth
In connection with the 2023 Reorganization (see Note 3), TerrAscend issued $
15
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
Maturities of loans payable
Stated maturities of loans payable over the next five years are as follows:
|
|
June 30, 2026 |
|
|
|
|
(In thousands) |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 (1) |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
— |
|
Total principal payments |
|
$ |
|
|
|
|
|
|
|
(1) Balance excludes the Exit Fee, as described above within this note. |
|
|
|
|
The Company is subject to a financial covenant as a result of its loan payable with its primary lender. The Company was in compliance with its financial covenant as of June 30, 2026. In the event that, in future periods, the Company’s financial results are below levels required to maintain compliance with any of its covenant, the Company will assess and undertake appropriate corrective initiatives with a view to allowing it to continue to comply with its covenant.
The majority of the Company’s leases are operating leases used primarily for corporate offices and retail. The operating lease periods generally range from
Amounts recognized in the Consolidated Balance Sheets were as follows:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Operating leases: |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Operating lease liability classified as current |
|
|
|
|
|
|
||
Operating lease liability classified as non-current |
|
|
|
|
|
|
||
Total operating lease liabilities |
|
$ |
|
|
$ |
|
||
The Company recognized operating lease expense of $
Other information related to operating leases at June 30, 2026 and December 31, 2025 consisted of the following:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Weighted-average remaining lease term (years) |
|
|
|
|
|
|
||
Operating leases |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Weighted-average discount rate |
|
|
|
|
|
|
||
Operating leases |
|
|
% |
|
|
% |
||
Supplemental cash flow information related to leases are as follows:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Cash paid for amounts included in measurement of operating lease liabilities |
|
$ |
|
|
$ |
|
||
Right-of-use assets obtained in exchange for operating lease obligations |
|
|
|
|
|
|
||
16
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
Undiscounted lease obligations are as follows:
|
|
June 30, 2026 |
|
|
|
|
(In thousands) |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total lease payments |
|
|
|
|
Less: interest |
|
|
( |
) |
Total lease liabilities |
|
$ |
|
|
On June 23 and June 30, 2026, the Company entered into subscription agreements with certain accredited investors (the “Debenture Subscription Agreements”) in connection with a private placement offering of secured convertible debentures of the Company (the “2026 Private Placement Convertible Debentures”) and closed the initial issuance and sale of
The Company’s existing senior unsecured convertible debentures had an aggregate principal balance of $
The 2026 Private Placement Convertible Debentures mature on September 30, 2031 (the “Maturity Date”) and bear interest at a rate of
In accordance with ASC 815, Derivatives and Hedging, the conversion option was bifurcated from the host instrument as the instrument's strike price is denominated in a currency other than the functional currency of the Issuer. It was recorded at fair value, using the Black-Scholes Option Pricing Model (the "Black-Scholes Model") (see Note 22). The proceeds are allocated first to the conversion option based on its fair value of $
17
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
The following table summarizes the Company’s 2026 Private Placement Convertible Debentures activity for the period ended June 30, 2026:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Convertible debt issued in private placement - Maturing September 30, 2031 |
|
$ |
|
|
$ |
— |
|
|
Transaction costs |
|
|
( |
) |
|
|
— |
|
Allocation to conversion option |
|
|
|
|
|
— |
|
|
Allocation to debt |
|
|
|
|
|
— |
|
|
Interest and accretion |
|
|
|
|
|
— |
|
|
Net carrying amount |
|
$ |
|
|
$ |
— |
|
|
The following table summarizes the Company's convertible promissory note in connection with the acquisition of Union Chill ("Union Chill Convertible Promissory Note") activity for the period ended June 30, 2026:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Convertible debt issued as acquisition consideration - Maturing December 2029 |
|
$ |
|
|
$ |
|
||
Allocation to conversion option |
|
|
|
|
|
|
||
Allocation to debt |
|
|
|
|
|
|
||
Interest and accretion |
|
|
|
|
|
— |
|
|
Net carrying amount |
|
$ |
|
|
$ |
|
||
Share Repurchase Authorization
On August 20, 2025, the Board approved a program to repurchase up to $
As of June 30, 2026, the Company had a total of
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands, except per share data) |
|
|||||||||||||
Total Common Shares repurchased |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common Shares canceled |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average price per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Excise tax (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
18
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
(1) The excise tax accrued in connection with the share repurchases was recorded as an adjustment to the cost basis of repurchased shares in treasury stock and within accrued expenses on the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, as applicable.
Warrants
The following is a summary of the outstanding warrants for Common Shares:
|
|
Number of Common Share Warrants Outstanding |
|
|
Number of Common Share Warrants Exercisable |
|
|
Weighted Average Exercise Price $ |
|
|
Weighted Average Remaining Life (years) |
|
||||
Outstanding, December 31, 2025 |
|
|
|
|
|
|
|
$ |
|
|
|
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Expired |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Outstanding, June 30, 2026 |
|
|
|
|
|
|
|
$ |
|
|
|
|
||||
Share-based payments expense
Total share-based payments expense was as follows:
|
For the Three Months Ended |
|
For the Six Months Ended |
|
||||||||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands) |
|
|||||||||||||
Stock options |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Restricted share units |
|
|
|
|
|
|
|
$ |
|
|
|
|
||||
Total share-based payments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Stock Options
The following table summarizes the stock option activity for the six months ended June 30, 2026:
|
Number of Stock Options |
|
|
Weighted average remaining contractual life (in years) |
|
Weighted Average Exercise Price (per share) $ |
|
Aggregate intrinsic value |
|
||||
Outstanding, December 31, 2025 |
|
|
|
|
|
$ |
|
$ |
|
||||
Granted (1) |
|
|
|
|
— |
|
|
|
|
— |
|
||
Exercised |
|
( |
) |
|
|
— |
|
|
|
|
— |
|
|
Forfeited (1) |
|
( |
) |
|
|
— |
|
|
|
|
— |
|
|
Expired |
|
( |
) |
|
|
— |
|
|
|
|
— |
|
|
Outstanding, June 30, 2026 |
|
|
|
|
|
$ |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Exercisable, June 30, 2026 |
|
|
|
|
|
$ |
|
$ |
|
||||
(1) Includes options that were canceled and re-granted as part of the repricing of stock options, as further discussed below.
Repricing of Stock Options
On June 24, 2025, the Board approved a repricing of certain outstanding stock options, subject to the holders satisfying a twelve-month service condition. The modification affected
19
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
Share. The incremental compensation cost was recognized over the requisite service period, and as of June 30, 2026, the Company had fully recognized the incremental compensation cost associated with the option modification.
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between Company’s closing stock price on June 30, 2026 and December 31, 2025, respectively, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they exercised their in-the-money options on June 30, 2026 and December 31, 2025, respectively.
The fair value of the various stock options granted were estimated using the Black-Scholes Model with the following assumptions:
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Volatility |
|
|
|
|
||||
Risk-free interest rate |
|
|
|
|
||||
Expected life (years) |
|
|
|
|
||||
Dividend yield |
|
|
% |
|
|
% |
||
Volatility was estimated by using the historical volatility of the Company's stock price. The expected life in years represents the period of time that the options issued are expected to be outstanding. The risk-free rate is based on U.S. treasury bond issues with a remaining term approximately equal to the expected life of the options. Dividend yield reflects that the Company has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future.
The total estimated fair value of stock options that vested during the six months ended June 30, 2026 and 2025 was $
Restricted Share Units
The following table summarizes the activities for the RSUs for the six months ended June 30, 2026:
|
|
Number of RSUs |
|
|
Outstanding, December 31, 2025 |
|
|
|
|
Granted |
|
|
|
|
Vested |
|
|
( |
) |
Forfeited |
|
|
( |
) |
Outstanding, June 30, 2026 |
|
|
|
|
As of June 30, 2026, total unrecognized compensation cost related to unvested RSUs was $
Non-controlling interest consists mainly of a
The following table summarizes the non-controlling interest activity for the six months ended June 30, 2026:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Opening carrying amount |
|
$ |
|
|
$ |
( |
) |
|
Capital contribution |
|
|
|
|
|
— |
|
|
Capital distributions |
|
|
( |
) |
|
|
( |
) |
Derecognition of non-controlling interest |
|
|
|
|
|
|
||
Net income attributable to non-controlling interest |
|
|
|
|
|
|
||
Ending carrying amount |
|
$ |
|
|
$ |
|
||
20
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
Parties are related if one party has the ability, directly or indirectly, to control or exercise significant influence over the other party in making financing and operating decisions. As of June 30, 2026, certain funds controlled by the Company's Executive Chairman, a related party of the Company, invested $
The Company's effective tax rate was
The Company has computed its provision for income taxes based on the actual effective tax rate for the quarter as the Company believes this is the best estimate for the annual effective tax rate. The Company is subject to income taxes in the United States and Canada.
Significant judgment is required in evaluating the Company’s uncertain tax positions and determining the provision for income taxes.
A reconciliation of the beginning and ending amount of unrecognized tax benefits for the period presented:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Balance at beginning of year |
|
$ |
|
|
$ |
|
||
Increase based on tax positions related to current periods |
|
|
|
|
|
|
||
Increase based on tax positions related to prior periods |
|
|
— |
|
|
|
|
|
Settlements with tax authorities |
|
|
— |
|
|
|
( |
) |
Balance at end of year |
|
$ |
|
|
$ |
|
||
A reconciliation of the beginning and ending amount of uncertain tax liabilities, inclusive of accruals for related penalties and interest, for the period presented:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Balance, beginning of year |
|
$ |
|
|
$ |
|
||
Reductions based on tax positions related to prior years |
|
|
— |
|
|
|
( |
) |
Additions based on tax positions related to prior years |
|
|
|
|
|
|
||
Additions based on tax positions related to current year |
|
|
|
|
|
|
||
Additions based on refunds received related to prior years |
|
|
|
|
|
— |
|
|
Ending carrying amount (1) |
|
$ |
|
|
$ |
|
||
(1) Interest and penalties related to uncertain tax liabilities are recorded as components of the provision for income taxes. As of June 30, 2026 and December 31, 2025, the Company had interest and penalties accrued of $
The increase in uncertain tax positions is primarily due to legal interpretations that challenge the application of Section 280E of the Internal Revenue Code of 1986, as amended, to the Company (“280E Tax Position”). The Company believes it is reasonably possible that the unrecognized tax benefits will increase over the next twelve months due to its 280E Tax Position.
The Company files income tax returns in the U.S. federal jurisdiction, multiple U.S. state jurisdictions, and certain non-U.S. jurisdictions. The Company and its subsidiaries are subject to examination by various U.S. and non-U.S. taxing authorities. The Company is no longer subject to U.S. federal, state, or non-U.S. income tax examinations for tax years prior to 2022, other than items
21
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
under examination. The Company is currently under examination by the Internal Revenue Service for U.S. federal income tax years 2021 through 2023. On April 6, 2026, the Company received correspondence from the U.S. Department of Justice ("DOJ") related to a federal income tax refund previously received by the Company for the 2020 tax year. The correspondence seeks repayment of approximately $
The Company’s general and administrative expenses were as follows:
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|||||||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands) |
|
||||||||||||||
Salaries and wages |
|
$ |
|
|
$ |
|
|
|
$ |
|
|
|
|
||||
Office and general |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Professional fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lease expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Share-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Facility and maintenance |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for expected credit losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Board of directors cash compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
||||
The Company’s disaggregated net revenue by source, primarily due to the Company’s contracts with its external customers was as follows:
|
For the Three Months Ended |
|
For the Six Months Ended |
|
||||||||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands) |
|
|||||||||||||
Retail |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Wholesale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
For the three and six months ended June 30, 2026 and 2025, the Company did
The Company’s finance and other expenses included the following:
|
For the Three Months Ended |
|
For the Six Months Ended |
|
||||||||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||||
|
|
(In thousands) |
|
|||||||||||||
Interest |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accretion |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
22
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
Operating Segment
The Company manages its operations through state-level operating segments, focused on the production and sale of cannabis products and regularly monitors for changes in facts and circumstances that may affect its determination of operating segments. Following further evaluation of the aggregation criteria under Accounting Standards Codification 280, Segment Reporting, the Company determined that it operates under
The following tables summarize financial information for the Company's reportable segments:
|
|
For the Three Months Ended June 30, 2026 |
|
|||||||||||||||||
|
|
New Jersey |
|
|
Maryland |
|
|
Pennsylvania |
|
|
All other segments |
|
|
Total |
|
|||||
|
|
(In thousands) |
|
|||||||||||||||||
Revenue, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Cost of sales (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
Gross Profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest and accretion expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income from continuing operations before provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross profit margin (2) |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|||||
|
|
For the Three Months Ended June 30, 2025 |
|
|||||||||||||||||
|
|
New Jersey |
|
|
Maryland |
|
|
Pennsylvania |
|
|
All other segments |
|
|
Total |
|
|||||
|
|
(In thousands) |
|
|||||||||||||||||
Revenue, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Cost of sales (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
Gross Profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest and accretion expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Income from continuing operations before provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross profit margin (2) |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|||||
(1) Depreciation and amortization included in cost of sales for the three months ended June 30, 2026 and 2025 was $
(2) The calculation of Gross profit margin is revenue, net less cost of sales, divided by revenue, net.
23
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
|
|
For the Six Months Ended June 30, 2026 |
|
|||||||||||||||||
|
|
New Jersey |
|
|
Maryland |
|
|
Pennsylvania |
|
|
All other segments |
|
|
Total |
|
|||||
|
|
(In thousands) |
|
|||||||||||||||||
Revenue, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Cost of sales (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
Gross Profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest and accretion expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Income from continuing operations before provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross profit margin (2) |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|||||
|
|
For the Six Months Ended June 30, 2025 |
|
|||||||||||||||||
|
|
New Jersey |
|
|
Maryland |
|
|
Pennsylvania |
|
|
All other segments |
|
|
Total |
|
|||||
|
|
(In thousands) |
|
|||||||||||||||||
Revenue, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Cost of sales (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
Gross Profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest and accretion expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Income from continuing operations before provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross profit margin (2) |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|||||
(1) Depreciation and amortization included in cost of sales for the six months ended June 30, 2026 and 2025 was $
(2) The calculation of Gross profit margin is revenue, net less cost of sales, divided by revenue, net.
Assets
Information about total assets by segment is not disclosed because such information is not regularly provided to, or used by the CODM.
Geography
The Company has subsidiaries located in Canada and the United States. For the three and six months ended June 30, 2026, net revenue was primarily generated from sales in the United States. The Company's consolidated retail location in Canada generated net revenue of $
24
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
Assets and liabilities measured at fair value
Financial instruments recorded at fair value are estimated by applying a fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy is summarized as follows:
The following table represents the fair value amounts of financial assets and financial liabilities:
|
At June 30, 2026 |
|
At December 31, 2025 |
|
||||||||||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||||
|
|
(In thousands) |
|
|||||||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents |
|
$ |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
|
|
— |
|
|
|
— |
|
||
Restricted cash |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Residual economic interest in Michigan assets |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Purchase option |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Total Assets |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bifurcated conversion options |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total Liabilities |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
There were
The valuation approaches and key inputs for each category of assets or liabilities that are classified within levels of the fair value hierarchy are presented below:
Level 1
Includes cash, cash equivalents, and restricted cash represent financial instruments for which the carrying amount approximates fair value due to their short-term maturities.
Level 2
Includes bifurcated conversion options which are valued using the Black-Scholes Model with observable market inputs such as stock price, historical volatility, risk-free rate, and expected term. These inputs are derived from market data and do not require significant judgment.
The following table summarizes the changes in the derivative liability:
|
|
(In thousands) |
|
|
Balance at December 31, 2025 |
|
$ |
|
|
Private placement conversion option issued |
|
$ |
|
|
Fair value loss on revaluation of bifurcated conversion options |
|
|
( |
) |
Effects of movements in foreign exchange |
|
|
( |
) |
Balance at June 30, 2026 |
|
$ |
|
|
25
TerrAscend Corp.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)
Bifurcated conversion options
The conversion option bifurcated from the 2026 Private Placement Convertible Debentures (see Note 12) has been measured at fair value as of June 30, 2026 and December 31, 2025. Key inputs and assumptions used in the Black-Scholes Model were as follows:
|
|
June 30, 2026 |
|
|
June 23, 2026 |
|
||
Option exercise price |
|
$ |
|
|
$ |
|
||
Annual volatility |
|
|
% |
|
|
% |
||
Annual risk-free rate |
|
|
% |
|
|
% |
||
Expected term (in years) |
|
|
|
|
|
|
||
The conversion option bifurcated from the Union Chill Convertible Promissory Note has been measured at fair value as of June 30, 2026 and December 31, 2025. Key assumptions used in the Black-Scholes Model were as follows:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Option exercise price |
|
$ |
|
|
$ |
|
||
Annual volatility |
|
|
% |
|
|
% |
||
Annual risk-free rate |
|
|
% |
|
|
% |
||
Expected term (in years) |
|
|
|
|
|
|
||
Commitments
On
Legal proceedings
In the ordinary course of business, the Company is involved in a number of lawsuits incidental to its business, including litigation related to intellectual property, product liability, employment, and commercial matters. Although it is difficult to predict the ultimate outcome of these matters, management believes that any ultimate liability would not have a material adverse effect on the Consolidated Financial Statements. As of June 30, 2026 there were no pending lawsuits that could reasonably be expected to have a material effect on the results of the Company’s Consolidated Financial Statements.
On August 5, 2026, the Board appointed Ziad Ghanem, the Company’s President and Chief Executive Officer, to serve as a member of the Board, effective immediately.
26
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of financial condition and results of operations of TerrAscend Corp. (the “Issuer”), its subsidiaries, including TerrAscend Growth Corp. (“TerrAscend”) and its subsidiaries (collectively, the “Company”) should be read in conjunction with the Company's unaudited interim condensed consolidated financial statements ("Consolidated Financial Statements") and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial information and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission, (the “SEC”), on March 12, 2026, (the “Annual Report”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q including information with respect to the Company's plans and strategy for its business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth under "Risk Factors" in the Company's Annual Report, its actual results could differ materially from the results described in or implied by the "Cautionary Note Regarding Forward-Looking Statements" contained in this Quarterly Report on Form 10-Q and in the following discussion and analysis.
Unless otherwise noted, dollar amounts in this Item 2 are in thousands of U.S. dollars.
This Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of operations of the Company is for the three and six months ended June 30, 2026 and 2025 and the accompanying notes for each respective period.
Overview
The Company is a leading North American cannabis company. The Company has vertically integrated licensed operations in Pennsylvania, New Jersey, Maryland and California. In addition, the Company has retail operations in Ohio and Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada. Notwithstanding the fact that various states in the United States have implemented medical marijuana laws or have otherwise legalized the use of cannabis, the use of cannabis remains illegal under U.S. federal law for any purpose, by way of the Controlled Substances Act of 1970.
The Company operates under three state-level reportable segments consisting of New Jersey, Maryland and Pennsylvania, focused on the production and sale of cannabis products. Operations in other states are presented within All other segments.
The Company owns a portfolio of operating businesses, including:
Recent Developments
27
Subsequent Transactions
Components of Results of Operations
The following discussion sets forth certain components of the Company's unaudited interim condensed consolidated statements of comprehensive loss as well as factors that impact those items.
Revenue, net
The Company generates revenue from the sale of cannabis products, brands, and services to the United States and Canadian markets. Revenues consist of wholesale and retail sales in the legal medical and adult-use market across Canada and in several U.S. states where cannabis has been legalized for medical or adult-use cannabis.
Cost of sales
Cost of sales primarily consists of expenses related to providing cannabis products and services to the Company's customers, including personnel-related expenses, the depreciation of property and equipment, amortization of acquired intangible assets, certain royalties, and other overhead costs.
Operating Expenses
General and administrative
General and administrative ("G&A") expenses consist primarily of personnel costs related to finance, human resources, legal, certain royalties, and other administrative functions. Additionally, G&A expenses include professional fees to third parties, as well as marketing expenses. Moreover, G&A expenses include share-based compensation on options, restricted share units and warrants.
28
Amortization and depreciation
Amortization and depreciation includes the amortization of intangible assets and the depreciation of property and equipment, in each case to the extent not included in the cost of sales. Amortization is calculated on a straight-line basis over the following terms:
Brand intangibles- indefinite lives |
Indefinite useful lives |
Software |
5 years |
Licenses |
15-30 years |
Depreciation of property and equipment is calculated on a straight-line basis over the estimated useful life of the asset using the following terms:
Buildings and improvements |
15-30 years |
Land |
Not depreciated |
Machinery & equipment |
5-15 years |
Office furniture & production equipment |
3-5 years |
Right of use assets and leasehold improvements |
Lease term |
Assets in process |
Not depreciated |
(Gain) loss on fair value of derivative liabilities
Derivative liabilities consist of convertible options, that contain embedded derivative features, which are remeasured to fair value at the end of each reporting period using the Black-Scholes Option Pricing Model (the "Black-Scholes Model"). A gain or loss is recognized as a result of the revaluation.
Finance and other expenses
Finance and other expenses consist primarily of interest and accretion expense on the Company's outstanding debt obligations.
Unrealized and realized foreign exchange loss
Unrealized and realized foreign exchange (gain) loss represents the loss recognized on the remeasurement of U.S. dollar ("USD") denominated cash and other assets recorded in the Canadian dollars ("CAD") functional currency at the Company's Canadian operations.
Provision for income taxes
Provision for income taxes consists of U.S. federal and state income taxes in certain jurisdictions in which the Company conducts business.
Results of Operations - Three Months Ended June 30, 2026 and June 30, 2025
Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.
Continuing Operations
The following tables represent the Company’s results of operations for the three months ended June 30, 2026 and 2025.
Revenue, net
|
For the Three Months Ended |
|
||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Revenue, net |
|
$ |
67,119 |
|
|
$ |
65,006 |
|
$ change |
|
$ |
2,113 |
|
|
|
|
|
% change |
|
|
3 |
% |
|
|
|
|
Revenue increased by $2,113, from $65,006 for the three months ended June 30, 2025 to $67,119 for the three months ended June 30, 2026. The increase was primarily attributable to Pennsylvania, where revenue increased $1,627 due to higher retail sales driven by
29
increased customer foot traffic. In both New Jersey and Maryland, retail sales were substantially offset by wholesale sales, resulting in relatively consistent revenue compared to the prior-year period. The remaining increase was attributable to all other segments.
Cost of sales
|
For the Three Months Ended |
|
||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Cost of sales |
|
$ |
30,869 |
|
|
$ |
31,771 |
|
$ change |
|
$ |
(902 |
) |
|
|
|
|
% change |
|
|
-3 |
% |
|
|
|
|
Cost of sales as a % of revenue |
|
|
46 |
% |
|
|
49 |
% |
Cost of sales decreased by $902, from $31,771 for the three months ended June 30, 2025 to $30,869 for the three months ended June 30, 2026. The decrease was primarily due to decreases of $592 and $996 in Pennsylvania and Maryland, respectively, driven by improved verticality and facility utilization. The decrease was partially offset by an increase of $414 in New Jersey. The remaining decrease was attributable to all other segments.
The decrease in cost of sales as a percentage of revenue is mainly due to reduced unit cost and improved cost absorption.
General and administrative expense
|
For the Three Months Ended |
|
||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
General and administrative expense |
|
$ |
22,852 |
|
|
$ |
20,980 |
|
$ change |
|
$ |
1,872 |
|
|
|
|
|
% change |
|
|
9 |
% |
|
|
|
|
The increase of $1,872 in general and administrative expense for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, was primarily due to operational expenses related to Company's acquisition of Union Chill Cannabis Company LLC ("Union Chill") and an increase in the provision for expected credit losses.
Finance and other expenses
|
For the Three Months Ended |
|
||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Finance and other expenses |
|
$ |
8,810 |
|
|
$ |
8,747 |
|
$ change |
|
$ |
63 |
|
|
|
|
|
% change |
|
|
1 |
% |
|
|
|
|
Finance and other expenses for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, was relatively flat.
Loss (gain) on fair value of derivative liabilities
|
For the Three Months Ended |
|
||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Loss (gain) on fair value of derivative liabilities |
|
$ |
1,171 |
|
|
$ |
(279 |
) |
$ change |
|
$ |
1,450 |
|
|
|
|
|
% change |
|
|
-520 |
% |
|
|
|
|
The loss on derivative liabilities of $1,171 for the three months ended June 30, 2026 compared with a gain of $279 for the three months ended June 30, 2025, was primarily driven by changes in the Common Share price during the respective periods, which resulted in changes in the fair value of the Company's outstanding derivative liabilities.
30
Provision for income taxes
|
For the Three Months Ended |
|
||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Provision for income taxes |
|
$ |
11,587 |
|
|
$ |
9,598 |
|
$ change |
|
$ |
1,989 |
|
|
|
|
|
% change |
|
|
21 |
% |
|
|
|
|
The provision for income taxes increased by $1,989 from $9,598 for the three months ended June 30, 2025 compared to $11,587 for the three months ended June 30, 2026 primarily driven by accrued interest and penalties related to the Company's uncertain tax position and higher relative gross profit margin.
Discontinued Operations
Discontinued Operations
|
For the Three Months Ended |
|
||||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Income (loss) from discontinued operations, net of tax |
|
$ |
2,004 |
|
|
$ |
(41,701 |
) |
$ change |
|
$ |
43,705 |
|
|
|
|
|
% change |
|
|
105 |
% |
|
|
|
|
Income from discontinued operations for the three months ended June 30, 2026 primarily reflects the gain recognized in connection with the deconsolidation of the Michigan Receivership Entities following the appointment of the Receiver. In contrast, the loss from discontinued operations for the three months ended June 30, 2025 primarily reflects impairment charges and operating losses incurred prior to the classification of the Company's Michigan operations as discontinued operations.
Results of Operations - Six Months Ended June 30, 2026 and June 30, 2025
Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.
Continuing Operations
The following tables represent the Company’s results of operations for the six months ended June 30, 2026 and 2025.
Revenue, net
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Revenue, net |
|
$ |
132,658 |
|
|
$ |
129,309 |
|
$ change |
|
$ |
3,349 |
|
|
|
|
|
% change |
|
|
3 |
% |
|
|
|
|
Revenue increased by $3,349, from $129,309 for the six months ended June 30, 2025 to $132,658 for the six months ended June 30, 2026. The increase was primarily attributable to Pennsylvania, where revenue increased $3,642 due to higher retail sales driven by increased customer foot traffic. In New Jersey, Maryland, and all other segments, retail sales were substantially offset by wholesale sales, resulting in relatively consistent revenue compared to the prior-year period.
31
Cost of sales
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Total cost of sales |
|
$ |
61,806 |
|
|
$ |
61,393 |
|
$ change |
|
$ |
413 |
|
|
|
|
|
% change |
|
|
1 |
% |
|
|
|
|
Cost of sales as a % of revenue |
|
|
47 |
% |
|
|
47 |
% |
Cost of sales for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, was relatively flat due to a decrease in cost of sales in New Jersey which was offset by an increase in cost of sales in Pennsylvania and Maryland.
The cost of sales as a % of revenue remained flat compared to the prior year.
General and administrative expense
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
General and administrative expense |
|
$ |
44,349 |
|
|
$ |
42,129 |
|
$ change |
|
$ |
2,220 |
|
|
|
|
|
% change |
|
|
5 |
% |
|
|
|
|
The increase of $2,220 in general and administrative expense for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, was primarily due to operational expenses related to the Ratio Cannabis, LLC and Union Chill acquisitions and an increase in the provision for expected credit losses.
Finance and other expenses
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Finance and other expenses |
|
$ |
18,135 |
|
|
$ |
17,082 |
|
$ change |
|
$ |
1,053 |
|
|
|
|
|
% change |
|
|
6 |
% |
|
|
|
|
The increase of $1,053 in finance and other expenses for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, was primarily due to an increase of interest and accretion related to the FG Loan.
Gain on fair value of derivative liabilities
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Gain on fair value of derivative liabilities |
|
$ |
(232 |
) |
|
$ |
(376 |
) |
$ change |
|
$ |
144 |
|
|
|
|
|
% change |
|
|
-38 |
% |
|
|
|
|
The gain on derivative liabilities of $232 for the six months ended June 30, 2026 compared with a gain of $376 for the six months ended June 30, 2025, was primarily driven by the decrease in fair value of private placement convertible debentures that expired during the second quarter of 2026.
32
Provision for income taxes
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Provision for income taxes |
|
$ |
21,837 |
|
|
$ |
20,105 |
|
$ change |
|
$ |
1,732 |
|
|
|
|
|
% change |
|
|
9 |
% |
|
|
|
|
The provision for income taxes increased by $1,732 from $20,105 for the six months ended June 30, 2025 compared to $21,837 for the six months ended June 30, 2026. This increase was primarily driven by accrued interest and penalties related to the Company's uncertain tax position and higher relative gross profit margin.
Discontinued Operations
Discontinued Operations
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
|
|
(In thousands) |
|
|||||
Income (loss) from discontinued operations, net of tax |
|
$ |
828 |
|
|
$ |
(46,305 |
) |
$ change |
|
$ |
47,133 |
|
|
|
|
|
% change |
|
|
-102 |
% |
|
|
|
|
Discontinued operations for the six months ended June 30, 2026 and 2025, reflected similar trends to the three month ended periods.
Liquidity and Capital Resources
Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Cash and cash equivalents |
|
$ |
42,026 |
|
|
$ |
37,414 |
|
Restricted Cash |
|
|
- |
|
|
|
110 |
|
Current assets |
|
|
113,463 |
|
|
|
110,108 |
|
Non-current assets |
|
|
440,242 |
|
|
|
447,271 |
|
Current liabilities |
|
|
61,997 |
|
|
|
79,931 |
|
Non-current liabilities |
|
|
407,666 |
|
|
|
378,427 |
|
Working capital |
|
|
51,466 |
|
|
|
30,177 |
|
Total shareholders' equity |
|
$ |
84,042 |
|
|
$ |
99,021 |
|
The calculation of working capital provides additional information and is not defined under GAAP. The Company defines working capital as current assets less current liabilities. Management believes that working capital provides useful information to investors because it reflects the Company’s short-term financial health and its ability to meet current obligations with current assets. This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP.
Management assesses the Company's liquidity in terms of its ability to generate cash to fund its operating, investing, and financing activities. The Company remains in a strong financial position, with resources available for reinvesting in existing businesses, conducting acquisitions, and managing its capital structure on a short and long-term basis. The Company believes its existing cash balances will be sufficient to meet its anticipated cash requirements from the date of this Quarterly Report on Form 10-Q through at least the next 12 months
Since its inception, the Company's primary sources of capital have been through the issuance of equity securities or debt facilities, and the Company has received aggregate net proceeds from such transactions totaling $880,299 as of June 30, 2026.
The Company expects to fund any additional future requirements through the following sources of capital:
33
As of June 30, 2026, the Company had $209,682 in principal outstanding under its loans payable, excluding any prepayment or exit fees, of which $6,570 is due in the next twelve months. The Company also had $31,085 in principal outstanding under its convertible debt, none of which is due within the next twelve months.
The Company has entered into leases for certain premises and offices for which it owes monthly lease payments. The Company has $58,703 in lease obligations. Of this amount, $4,383 of lease payments are due in the next twelve months.
As of June 30, 2026, the Company had accounts payable and accrued liabilities of $40,133 and corporate income taxes payable of $2,290.
The Company intends to meet its capital commitments through any or all of the sources of capital noted above. The Company's objective with respect to its capital management is to ensure it has sufficient cash resources to maintain its ongoing operations and finance future obligations.
The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company's results of operations or financial condition, including and without limitation, such consideration as liquidity and capital resources.
The Company is subject to a financial covenant as a result of its loan payable with its primary lender. The Company was in compliance with its debt covenant as of June 30, 2026. In the event that, in future periods, the Company’s financial results are below levels required to maintain compliance with its covenant, the Company will assess and undertake appropriate corrective initiatives with a view to allowing it to continue to comply with its covenant. Other than the covenant related to loans payable, the Company is not subject to externally imposed capital requirements.
Debt Facilities
Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.
|
|
Principal Paid during the Six Months Ended June 30, 2026 |
|
|
Principal Outstanding as of June 30, 2026 |
|
||
|
|
(In thousands) |
|
|||||
FocusGrowth Term Loan |
|
$ |
15,590 |
|
|
$ |
202,092 |
|
Blue Ridge Promissory Note |
|
|
176 |
|
|
|
2,583 |
|
Ratio Promissory Note |
|
|
— |
|
|
|
3,980 |
|
Other Loans |
|
|
2 |
|
|
|
1,027 |
|
2023 Private Placement Convertible Debentures |
|
|
8,630 |
|
|
|
250 |
|
Union Chill Convertible Promissory Note |
|
|
— |
|
|
|
9,000 |
|
2026 Private Placement Convertible Debentures |
|
|
— |
|
|
|
21,835 |
|
Total |
|
$ |
24,398 |
|
|
$ |
240,767 |
|
FocusGrowth Term Loan
On August 1, 2024, the Issuer and TerrAscend USA, Inc., as guarantors, and certain subsidiaries and affiliates of the Company, as borrowers (collectively, the “Borrowers”), and FG Agency Lending LLC, as the administrative agent for the lenders (the "Agent"), entered into a Loan Agreement (the “Initial FG Loan Agreement”) for a four-year, $140,000 senior-secured term loan.
On July 8, 2025, additional subsidiaries of the Company (the "Incremental Amendment Borrowers"), became parties to the Initial FG Loan Agreement as borrowers pursuant to a joinder agreement (the "FG Loan Amendment") and, together with the Initial FG Loan Agreement and such other amendments to the Initial FG Loan Agreement, the “FG Loan Agreement”), which provided for a $79,000 upsize to the Initial FG Loan Agreement, and following which TerrAscend USA, Inc. no longer served as guarantor. Funds received pursuant to the FG Loan Agreement were used to retire certain Company indebtedness, in addition to being used for future growth initiatives.
34
On May 1, 2026, the Company, the Borrowers, the Incremental Amendment Borrowers, certain lenders party to the FG Loan Agreement (constituting “Required Lenders” under the FG Loan Agreement) and the Agent entered into the Forbearance Agreement in relation to certain events of default that occurred or were anticipated under the FG Loan Agreement, resulting from the Michigan Receivership, (the “Specified Defaults”). Under the Forbearance Agreement, the Secured Parties (as defined in the Forbearance Agreement) agreed to conditionally waive the Specified Defaults and forbear from exercising default-related remedies during the period from the Forbearance Effective Date ending the earliest to occur of the termination of the receivership process and the occurrence of any event of default not otherwise specified in the Forbearance Agreement (the “Forbearance Period”). Upon the “Successful Exit” (as defined in the Forbearance Agreement) of the Michigan Receivership, all Specified Defaults (as defined below) will be deemed automatically and irrevocably waived by the Secured Parties.
Within five days of receipt of net cash proceeds from any disposition of Michigan real property, the Borrowers must prepay the term loans in the amount of such net cash proceeds.
On June 23, 2026, the parties to the FG Loan Agreement entered into Amendment No. 5 to Loan Agreement, which among other things, permitted the Company’s issuance of the 2026 Private Placement Convertible Debentures in an aggregate face amount of up to $25,000, the repayment of approximately $13,000 of the Company’s outstanding existing 9.9% senior unsecured convertible debentures that matured on June 23, 2026, and certain additional specified acquisitions and indebtedness.
The FG Loan bears interest at 12.75% per annum with a maturity date of August 1, 2028 (the "FG Loan Maturity Date"). The FG Loan is guaranteed by the Issuer and is secured by substantially all of the assets of the Borrowers and the Incremental Amendment Borrowers. Depending on the timing of repayment, an exit fee of between 2.0% and 4.0% of the FG Loan (the "Exit Fee") will be due upon either the prepayment, in part or in full, of the FG Loan or the FG Loan Maturity Date.
The FG Loan Agreement contains covenants that limit the Borrowers’ and the Incremental Amendment Borrowers' ability to, among other things: (i) incur additional indebtedness or guarantee indebtedness; (ii) create liens; (iii) pay dividends; (iv) make investments; (v) enter into transactions with affiliates; and (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of their respective assets. The FG Loan Agreement also includes a minimum liquidity covenant with respect to the Borrowers and the Incremental Amendment Borrowers. If an event of default occurs and is not cured within an applicable grace period or waived, the principal amount, any accrued interest and any other obligations outstanding under the FG Loan Agreement may become immediately due and payable.
The FG Loan Agreement also provides for an uncommitted term loan facility of up to $35,000 (the "Uncommitted Term Loan Facility"). The terms of the Uncommitted Term Loan Facility are consistent with the FG Loan. As of June 30, 2026, the Company has drawn $3,105 of the Uncommitted Term Loan Facility with a remaining availability of $31,895.
During the six months ended June 30, 2026, the Company made aggregate prepayments of $15,590 on the FG Loan, including applicable 3% prepayment fees.
Blue Ridge Promissory Note
In connection with the acquisition of Hempaid, LLC on June 30, 2023 ("Blue Ridge") the Company entered into a promissory note with Blue Ridge bearing interest at 7.0% with a maturity date of June 30, 2027.
35
Ratio Promissory Note
In connection with the acquisition of the assets of Ratio Cannabis, LLC on May 7, 2025 ("Ratio") the Company entered into a promissory note with Ratio bearing interest at 6.0% with a maturity date of May 7, 2027.
Other Loans
Class A Shares of TerrAscend Growth
In connection with the 2023 Reorganization (see Note 3), TerrAscend issued $1,000 of Class A shares with a 20% guaranteed annual dividend ("Class A Shares") to an investor. TerrAscend holds a call right and the investor holds a put right (exercisable after June 28, 2028) with respect to the Class A Shares. The instrument is accounted for as debt. See Note 10 to the Consolidated Financial Statements for additional detail.
Convertible Debt
2026 Private Placement Convertible Debentures
On June 23 and June 30, 2026, the Company entered into subscription agreements with certain accredited investors (the “Debenture Subscription Agreements”) in connection with a private placement offering of secured convertible debentures of the Company (the “2026 Private Placement Convertible Debentures”) and closed the initial issuance and sale of 21,835 debentures at a purchase price of $1,000 per debenture (the “Debenture Offering”). The Company used $11,124 of the proceeds from the Debenture Offering to retire the Company’s existing senior unsecured convertible debentures that matured on June 23, 2026, with the remaining portion of the proceeds available for mergers and acquisitions, and the repayment or refinancing of indebtedness. The 2026 Private Placement Convertible Debentures mature on September 30, 2031 (the “Maturity Date”) and bear interest at a rate of 8.00% per annum, payable quarterly in arrears in cash, beginning on September 30, 2026. The Company may elect to pay all or any portion of such interest in kind by capitalizing the interest as additional principal (see Note 12 to the Consolidated Financial Statements). The 2026 Private Placement Convertible Debentures are convertible, in whole or in part, into Common Shares, at the option of the holder, at any time prior to the close of business on the last business day immediately preceding the Maturity Date, at a conversion price of $0.87 per Common Share. The 2026 Private Placement Convertible Debentures are secured by a second lien on certain assets of the U.S. business and also secured by certain personal property assets of TerrAscend USA, Inc. under a subordinated guaranty and security agreement.
Union Chill Convertible Promissory Note
On December 26, 2025, the Company issued a convertible promissory note for $9,000 in relation to the transaction with Union Chill. Unless repaid or converted earlier, the outstanding principal and interest shall be due and payable on December 26, 2029 (the "Convertible Note Maturity Date"). The convertible promissory note bears interest at the rate of 6.5% per annum payable in quarterly payments within five days following the first business day of each fiscal quarter. The convertible promissory note is convertible into Common Shares, at the option of the holder, at any time or times prior to the close of business on the last business day immediately preceding the Convertible Note Maturity Date, at a conversion price of $1.89 per Common Share.
Share Repurchases
Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.
On August 20, 2025, the Board approved the Share Repurchase Program, which replaced the Original Program. The Share Repurchase Program authorizes the Company to repurchase up to 10,000,000 Common Shares of the Company at any time, or from time to time, from August 22, 2025 until August 21, 2026. The Share Repurchase Program authorizes the Company to repurchase up to 60,255 Common Shares daily, which represents 25% of the Company’s average daily trading volume on the TSX of 241,023 Common Shares. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. The size and timing of any repurchases will depend on price, market and business conditions, and other factors.
During the second quarter of 2026, the Company repurchased 463,500 common shares under the Share Repurchase Program for total consideration of $311. As of June 30, 2026, the Company had a total of 9,346,500 Common Shares remaining that can be authorized for repurchase.
36
Cash Flows
Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.
Cash flows provided by operating activities
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Net cash provided by operating activities - continuing operations |
|
$ |
16,037 |
|
|
$ |
18,479 |
|
Net cash used in operating activities - discontinued operations |
|
|
(971 |
) |
|
|
(7,658 |
) |
Net cash provided by operating activities |
|
$ |
15,066 |
|
|
$ |
10,821 |
|
Continuing Operations
The decrease of $2,442 in net cash provided by operating activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by changes in net working capital, including increased inventory.
Discontinued Operations
Net cash used in operating activities for the six months ended June 30, 2026 primarily relates to costs associated with the disposition of certain assets and liabilities and entering into the Michigan Receivership. In contrast, net cash used in operating activities for the six months ended June 30, 2025 was primarily driven by unfavorable changes in working capital.
Cash flows used in investing activities
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Net cash used in investing activities - continuing operations |
|
$ |
(3,017 |
) |
|
$ |
(10,381 |
) |
Net cash provided by (used in) investing activities - discontinued operations |
|
|
1,293 |
|
|
|
(737 |
) |
Net cash (provided by) investing activities |
|
$ |
(1,724 |
) |
|
$ |
(11,118 |
) |
Continuing Operations
The decrease of $7,364 in net cash used in investing activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by a decrease of $2,146 for investments in capital expenditures. The change was also attributable to cash consideration, net of cash acquired of $3,722 paid in connection with the Union Chill acquisition, and a $3,400 refund of the deposit for a potential business acquisition.
Discontinued Operations
The increase of $2,030 in net cash provided by (used in) investing activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by the sale of property and equipment related to the exit of Michigan.
Cash flows used in financing activities
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Net cash (used in) provided by financing activities - continuing operations |
|
$ |
(8,833 |
) |
|
$ |
283 |
|
Net cash used in financing activities - discontinued operations |
|
|
(200 |
) |
|
|
- |
|
Net cash (used in) provided by financing activities |
|
$ |
(9,033 |
) |
|
$ |
283 |
|
Continuing Operations
The increase of $8,550 in net cash used in financing activities for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily attributable to higher loan principal paid, including exit fees, of $14,270, repayments of existing private placement convertible debentures of $8,630, and higher distributions to non-controlling interests during 2026. This was partially offset by $18,967 net of proceeds received from the issuance of the 2026 Private Placement Convertible Debentures. In contrast, financing activities during the prior-year period included $5,000 of loan proceeds, net of transaction costs.
37
Discontinued Operations
The net cash used in financing activities for the six months ended June 30, 2026 was primarily driven by the finance lease termination fee paid.
Reconciliation of Non-GAAP Measures
Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.
In addition to reporting the financial results in accordance with GAAP, the Company reports certain financial results that differ from what is reported under GAAP. Non-GAAP measures used by management do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. The Company believes that certain investors and analysts use these measures to measure a company’s ability to meet other payment obligations or as a common measurement to value companies in the cannabis industry, and the Company calculates: (i) Free cash flow from net cash provided by operating activities from continuing operations less capital expenditures for property and equipment which management believes is an important measurement of the Company's ability to generate additional cash from its business operations, and (ii) EBITDA from continuing operations and Adjusted EBITDA from continuing operations as net loss, adjusted to exclude provision for income taxes, finance expenses, depreciation and amortization, share-based compensation, unrealized and realized (gain) loss on investments, (gain) loss from revaluation of contingent consideration, unrealized and realized foreign exchange (gain) loss, loss (gain) on fair value of derivative liabilities, (gain) loss on lease terminations, and certain other items, which management believes is not reflective of the ongoing operations and performance of the Company. Such information is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
The Company believes Adjusted EBITDA from continuing operations is a useful performance measure to assess the performance of the Company as it provides more meaningful ongoing operating results by excluding the effects of expenses that are not reflective of the Company’s underlying business performance and other one-time or non-recurring expenses.
The table below reconciles net loss to EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the three and six months ended June 30, 2026 and 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||||||
|
Notes |
|
June 30, 2026 |
|
|
|
June 30, 2025 |
|
|
|
June 30, 2026 |
|
|
|
June 30, 2025 |
|
||||
|
|
|
(In thousands) |
|
||||||||||||||||
Net loss |
|
|
$ |
(8,055 |
) |
|
|
$ |
(48,107 |
) |
|
|
$ |
(16,060 |
) |
|
|
$ |
(60,376 |
) |
(Income) loss from discontinued operations |
|
|
|
(2,004 |
) |
|
|
|
41,701 |
|
|
|
|
(828 |
) |
|
|
|
46,305 |
|
Net loss from continuing operations |
|
|
|
(10,059 |
) |
|
|
|
(6,406 |
) |
|
|
|
(16,888 |
) |
|
|
|
(14,071 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Add (deduct) the impact of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for income taxes |
|
|
|
11,587 |
|
|
|
|
9,598 |
|
|
|
|
21,837 |
|
|
|
|
20,105 |
|
Finance expenses |
|
|
|
9,347 |
|
|
|
|
8,962 |
|
|
|
|
19,100 |
|
|
|
|
17,383 |
|
Amortization and depreciation |
|
|
|
3,881 |
|
|
|
|
3,784 |
|
|
|
|
8,021 |
|
|
|
|
7,729 |
|
EBITDA from continuing operations |
(a) |
|
|
14,756 |
|
|
|
|
15,938 |
|
|
|
|
32,070 |
|
|
|
|
31,146 |
|
Add (deduct) the impact of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Share-based compensation |
(b) |
|
|
829 |
|
|
|
|
779 |
|
|
|
|
1,714 |
|
|
|
|
2,293 |
|
Loss (gain) on fair value of derivative liabilities |
(c) |
|
|
1,171 |
|
|
|
|
(279 |
) |
|
|
|
(232 |
) |
|
|
|
(376 |
) |
Unrealized and realized foreign exchange loss (gain) |
(d) |
|
|
333 |
|
|
|
|
(648 |
) |
|
|
|
511 |
|
|
|
|
(607 |
) |
Unrealized and realized (gain) loss on investments |
(e) |
|
|
271 |
|
|
|
|
(7 |
) |
|
|
|
271 |
|
|
|
|
735 |
|
(Gain) loss on lease termination |
(f) |
|
|
(1 |
) |
|
|
|
— |
|
|
|
|
35 |
|
|
|
|
— |
|
(Gain) loss from revaluation of contingent consideration |
(g) |
|
|
— |
|
|
|
|
(34 |
) |
|
|
|
— |
|
|
|
|
346 |
|
Other one-time items |
(h) |
|
|
302 |
|
|
|
|
267 |
|
|
|
|
656 |
|
|
|
|
625 |
|
Adjusted EBITDA from continuing operations |
|
|
$ |
17,661 |
|
|
|
$ |
16,016 |
|
|
|
$ |
35,025 |
|
|
|
$ |
34,162 |
|
38
Adjusted EBITDA from continuing operations increased by $1,773 and $991 for the three and six months ended June 30, 2026 as compared to three and six months ended June 30, 2025, respectively. These increases were primarily driven by gross profit margin expansion.
The table below reconciles net cash provided by operating activities from continuing operations to free cash flow for the six months ended June 30, 2026 and 2025:
|
|
|
For the Six Months Ended |
|
||||||
|
|
|
June 30, 2026 |
|
|
|
June 30, 2025 |
|
||
|
|
|
(In thousands) |
|
||||||
Net cash provided by operating activities - continuing operations |
|
|
$ |
16,037 |
|
|
|
$ |
18,479 |
|
Capital expenditures for property and equipment |
|
|
|
(2,504 |
) |
|
|
|
(4,650 |
) |
Free Cash Flow |
|
|
$ |
13,533 |
|
|
|
$ |
13,829 |
|
Critical Accounting Estimates and Policies
The Consolidated Financial Statements have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. The Company bases its estimates on historical experience and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and actual results, the Company's future financial statements will be affected.
There have been no significant changes to the critical accounting estimates from the information provided in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", as contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
Emerging Growth Company and Smaller Reporting Company Status
The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company's Consolidated Financial Statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
The Company will remain an emerging growth company until the earlier to occur of: (i) December 31, 2027 (a) in which the Company has total annual gross revenue of $1,235,000 or more, or (b) in which the Company is deemed to be a large accelerated filer, which means the market value of the Company's Common Shares that are held by non-affiliates exceeds $700,000 as of the last business day of the Company’s most recent second fiscal quarter; and (ii) the date on which the Company has issued more than $1,000,000 in non-convertible debt during the prior three-year period.
Additionally, as of June 30, 2025, the market value of the Common Shares held by non-affiliates decreased to below $60,000, which triggered the Company being classified as a smaller reporting company and non-accelerated filer with respect to SEC regulations and
39
filing requirements effective December 31, 2025. The Company will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our Common Shares held by non-affiliates exceeds $250,000 as of the last business day of our second fiscal quarter, and (ii) either our annual revenue exceeded $100,000 during such completed fiscal year or the market value of our Common Shares held by non-affiliates exceeds $700,000 as of the last business day of our second fiscal quarter. As the market value of the Common Shares held by non-affiliates remained below $250,000 as of June 30, 2026, the Company will continue to qualify as a smaller reporting company.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes in the Company's primary risk exposures or management of market risks from those disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The Company's management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2026, the Company's disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the Company's disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
In the ordinary course of business, the Company is involved in a number of lawsuits incidental to its business, including litigation related to intellectual property, product liability, employment, and commercial matters. Although it is difficult to predict the ultimate outcome of these matters, management believes that any ultimate liability would not have a material adverse effect on the Consolidated Balance Sheets or results of operations. As of June 30, 2026, there were no pending lawsuits that could reasonably be expected to have a material effect on the results of the Company's Consolidated Financial Statements.
Item 1A. Risk Factors.
Investing in the Company's Common Shares involves a high degree of risk. Please refer to Part I, Item 1A, “Risk Factors” in the Company's Annual Report for a description of the material risks and uncertainties to which the Company’s business, financial condition and results of operations are subject. The Company may disclose changes to risk factors or disclose additional factors from time to time in its future filings with the SEC. Additional risks and uncertainties not presently known to the Company or that the Company currently deems immaterial may impair its business operations. There have been no material changes to the risk factors previously disclosed in Part I, Item 1A, “Risk Factors” in the Company's Annual Report.
40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.
On August 20, 2025, the Board approved the Share Repurchase Program, which replaced the Original Program. The Share Repurchase Program authorizes the Company to repurchase up to 10,000,000 Common Shares of the Company at any time, or from time to time, from August 22, 2025 until August 21, 2026. The Share Repurchase Program authorizes the Company to repurchase up to 60,255 Common Shares daily, which represents 25% of the Company’s average daily trading volume on the TSX of 241,023 Common Shares. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. The size and timing of any repurchases will depend on price, market and business conditions, and other factors. During the second quarter of 2026, the Company repurchased Common Shares as set forth below:
Period |
|
Total Number of Common Shares Purchased |
|
|
Weighted Average Price Paid per Common Share |
|
|
Total Number of Common Shares as Part of a Publicly Announced Program |
|
|
Number of Common Shares that may yet be Purchased under the Program |
|
||||
April 1 through April 30, 2026 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
9,810,000 |
|
May 1 through May 31, 2026 |
|
|
398,000 |
|
|
$ |
0.67 |
|
|
|
398,000 |
|
|
|
9,412,000 |
|
June 1 through June 30, 2026 |
|
|
65,500 |
|
|
$ |
0.67 |
|
|
|
65,500 |
|
|
|
9,346,500 |
|
For the Quarter Ended June 30, 2026 |
|
|
463,500 |
|
|
|
0.67 |
|
|
|
463,500 |
|
|
|
9,346,500 |
|
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5.
Rule 10b5-1 Trading Plans
During the second quarter of 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, modified, or terminated a Rule 10b5-1 trading arrangement.
41
Item 6. Exhibits.
Exhibit |
|
|
|
Description of Exhibit Incorporated Herein by Reference |
Filed |
|||
Number |
|
Description |
|
Form |
File No. |
Exhibit |
Filing Date |
Herewith |
|
|
|
|
|
|
|
|
|
3.1 |
|
Articles of TerrAscend Corp., dated March 7, 2017. |
|
10-12G
|
000-56363 |
3.1 |
11/02/2021 |
|
|
|
|
|
|
|
|
|
|
3.2 |
|
Articles of Amendment to the Articles of TerrAscend Corp., dated November 30, 2018. |
|
10-12G/A
|
000-56363 |
3.2 |
12/22/2021
|
|
|
|
|
|
|
|
|
|
|
3.3 |
|
Articles of Amendment to the Articles of TerrAscend Corp., dated May 22, 2020. |
|
10-12G/A |
000-56363 |
3.3 |
12/22/2021
|
|
|
|
|
|
|
|
|
|
|
3.4 |
|
By-laws of TerrAscend Corp., dated March 7, 2017. |
|
10-12G
|
000-56363 |
3.3 |
11/02/2021 |
|
|
|
|
|
|
|
|
|
|
4.1 |
|
Form of Convertible Debenture. |
|
8-K |
000-56363 |
10.1 |
06/25/2026 |
|
|
|
|
|
|
|
|
|
|
10.1 |
|
Form of Subscription Agreement for Debenture Offering. |
|
8-K |
000-56363 |
4.1 |
06/25/2026 |
|
|
|
|
|
|
|
|
|
|
10.2† |
|
Employment Agreement, effective April 27, 2026, by and between TerrAscend USA, Inc. and Eric Jackson. |
|
8-K
|
000-56363
|
10.1
|
04/16/2026 |
|
|
|
|
|
|
|
|
|
|
10.3# |
|
Forbearance Agreement, on May 1, 2026, by and among TerrAscend USA, Inc., as Borrower Representative, the subsidiaries and affiliates of the Borrower Representative, as Borrowers, and FG Agency Lending LLC, as the Administrative Agent. |
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
10.4# |
|
Amendment No. 5, dated June 23, 2026, by and among TerrAscend USA, Inc., as Borrower Representative, the subsidiaries and affiliates of the Borrower Representative, as Borrowers, each of the lenders party thereto, and FG Agency Lending LLC, as the Administrative Agent. |
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
31.1 |
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
31.2 |
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
32.1* |
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
32.2* |
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
42
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
|
|
|
|
|
X |
* This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of TerrAscend Corp. under the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.
# Certain information contained in this agreement has been omitted because it is not material and is the type that the registrant treats as private or confidential.
† Indicates management contract or compensatory plan.
43
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
TerrAscend Corp. |
|
|
|
|
|
Date: August 6, 2026 |
|
By: |
/s/ Ziad Ghanem |
|
|
|
Ziad Ghanem |
|
|
|
President and Chief Executive Officer (Principal Executive Officer) |
|
|
|
|
|
|
|
|
Date: August 6, 2026 |
|
By: |
/s/ Eric Jackson |
|
|
|
Eric Jackson |
|
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
44